Home Buying in Sacramento>Question Details

Fanny Chu, Home Buyer in San Francisco County,...

Investing in Sacramento?

Asked by Fanny Chu, San Francisco County, CA Thu Jul 19, 2012

I'm thinking of investing in Sacramento, can someone please give me advice as to what are the good neighborhoods? I'm trying to keep it under $150k. I am currently in SF.

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To be effective you really should sit down with an agent face to face.
Or you will need to be much more specific. A high cash flow is relative,
high in your area is almost a break even, so we speak in terms of
return on investment to get actual numbers. I agree if your total purchase
budget is $150,000 fourplexes are unlikely and duplexes are going limited,
again depending what you are expecting for return on your $150,000.
A different view is that with multi units you don't have all your eggs in one
basket as you should never be
1 vote Thank Flag Link Thu Jul 19, 2012
HI Fanny,

I am from Elk Grove. I am therefore partial to some areas in South Sacramento.
Here you may find SFRs in the $150k price range, which are relatively new.
They can be rented out for around $1200-1300 per month.
The demographics is diverse with an increasing Asian population and many Asian restaurants and shopping centers.
For an out of town investor, I would be able to offer a turn key service from identifying an investment property, acquisition, renovation, leasing and property management.

Please call me if you have any questions,

Best regards,
James Tan
Bethany Real Estate and Investments
916-230-5250
0 votes Thank Flag Link Thu Aug 2, 2012
You should check the crime statistics in the areas you are looking. If you are coming from the BayArea I would recommend the mid-city area of Sacramento. There are a lot of things to do, plus art gallaries, resteraunts and museums. For under 150K you may find something interesting...
0 votes Thank Flag Link Tue Jul 24, 2012
Hi there Fanny...

It's kind of hard to find something under a $150,000 that's not going to need some work to get it in shape.

In addition, what I think you should do is come up here like I have told many investors before from the Bay Area and take what I call the "Chamber of Commerce Tour".

By driving around looking at some of the properties for sale along with the various neighborhoods, you'll know after one trip pretty much what you will like.

When you say you want a "high cash" flow, it would be nice if we all understood what you meant by that. What you may think is high, someone else would think is not.

Regards duplexes and four-plexes... I'm not a big fan of Four-plexes in this area for many reasons, but mostly because they don't have the amenities that a Single Family home has or even a Duplex.

If you'd like to see what the potential cash flow can be on a duplex, you can check out the link below that includes a video and the "pro-forma" cash flow analysis.

http://bit.ly/KxDANd


I hope this helps.

Make it a great day...!!!
0 votes Thank Flag Link Thu Jul 19, 2012
Thank you Erin for all the information! We will be in contact.
0 votes Thank Flag Link Thu Jul 19, 2012
This is a frequent question, but one that real estate professionals hesitate to answer because an opinion, innocently and honorably offered, might lead to an accusation of "Steering", (http://en.wikipedia.org/wiki/Racial_steering), or "Redlining", (http://en.wikipedia.org/wiki/Redlining).

It's frustrating, but it's the world we live in. You would probably be well served to contact a real estate professional in the area to discuss what your definition of a "Good" neighborhood is and what your goals are; balancing leverage/cash flow/ appreciation, etc. There are opportunities in very nice neighborhoods where the purchase price makes for a thin cash flow, but the risk is lower due to the age and condition of the home and neighborhood.

I am solely a property manager, (a "property management savant" so to speak), so I don't buy or sell homes, but my advice to my investor clients, (those who take the time to ask anyway), is to research crime stats and schools, (renters want their kids to be safe and successful, just like home owners do), then pick out some listings in the prospect areas and have me, (or another PM), do a rent analysis.

It's only a snapshot in time, and it's an extra step, but you at least have real data to plug into your ROI analysis.

I hope that helps.
0 votes Thank Flag Link Thu Jul 19, 2012
Great blog ref Erin!

Fanny, placing the property in the hands of a property management company will resolve the "easy to manage" concern. Your next concern was "high cash flow". That will be determined by what you get for rent subtracted by your monthly expenses on the property. Erin's blog link below looks like it will give you a great general idea.

However, sounds like you are looking for an agent who can help you pull the two together. Although I don't represent buyers, allow me to refer you to a great buyer's agent who assists Bay Area clients as well as international and local. Her name is Patsy Rogers. Please let her know I referred you. Her contact info is below.

Patsy Rogers
Fusion Real Estate Network, Inc.
3550 Watt Ave. STE.210
Sacramento, CA 95821
(916) 320-6383
http://www.patsyrogersmyagent.com/
0 votes Thank Flag Link Thu Jul 19, 2012
I wrote a blog at the beginning of the year about areas where the monthly rent on a single family home exceeded the monthly mortgage payment. Use this as a frame of reference as you contemplate areas to invest in, and develop a plan for doing so.

http://sacramentorealestateblog.blogspot.com/2012/01/sacrame…
0 votes Thank Flag Link Thu Jul 19, 2012
Erin Stumpf, Real Estate Pro in Sacramento, CA
MVP'08
Contact
I'd like something that is easy to manage and gives high cash flow. Thus, I am looking at mulit units, but not sure if there are any decent ones in this price range. Problem with duplexes and 4 plexes is that they are harder to manage. More moving parts to worry about than a SFR and more vacancies. Thats why I'd like a one stop shop; agent who can recommend good property mgmt company (or agent who does property mgmt also) and handyman, etc
0 votes Thank Flag Link Thu Jul 19, 2012
Hi Fanny,

You will need to define what you mean by "good". By law, we cannot tell you what we consider "good" neighborhoods. That is called steering.

If you mean good as in anything under $150K, then that could be any place in Sacramento county. As Patrick and Tina have stated below, you need to determine what your investment goals are and then prehaps re-word your question.

I would also recommend that you hire the services of a local area real estate professional who will sit with you and discuss your goals and help you map out a plan. I don't believe you can successfully accomplish that on a thread like this.

Hope that helps.

Keisha Mathews, REALTOR®
CDPE®, HRC®, HAFA® Certified
The Short Sale Lady(sm)
Century 21 Landmark Network
(916) 370-1803 cell/direct
(916) 405-3886 fax
keisha.mathews@century21.com
http://www.SheSoldItForMe.com
lic#: 01439130
0 votes Thank Flag Link Thu Jul 19, 2012
One of the first things you need to do is figure out what your investment goal
is. Are looking to maximize cash flow, future appreciation, ease of management
or getting "best deal". You typically cannot get all, so you have to decide what is
most important. Are you paying cash, or going to be getting financing? Are you
prepared to purchase a fixer, or do you need it in "rentable condition"?
Sacramento has a lot of great investment potential; I was recently speaking with
a bay area agent who was amazed at our return on investment.
Good neighborhood is a relative term that needs more explanation. As an investor
you may look at location differently than if you were looking for a personal home.Your
primary concern should be can you attract a quality tenant and keep the property
rented.
0 votes Thank Flag Link Thu Jul 19, 2012
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